When elderly persons can no longer care for themselves, they usually have only two primary options: care at home by unpaid relatives or high cost care in a nursing home; it is clear, then that a new system is needed that will offer older people more options. This report presents the major policy questions America faces in the search for a better way to guarantee dignity for the frail elderly. Long-term care is defined and reasons why America's present long-term care system needs to change are discussed. A section on moving toward a better long-term care system considers who has responsibility, what the best structure might be, and the influence of national values and economic considerations. The roles of the private and public sectors in providing long-term care are examined and a public/private mix is considered. Other sections look at protecting families and the poor, and also at payment strategies to assure more options for the elderly, including prospective payment, client-centered reimbursement, case management, and combining the financing and management of care. The report concludes by identifying the challenge that lies ahead in this area. A discussion of current actions being taken by state government and a list of speakers at the 1988 American Society on Aging conference "Conflicts in Care: Critical Debates in an Aging Society" are appended. (NB)